All Forum Posts by: Andrew Weiner

I would not reimburse the tenant.  It sets a precedence that they can seek reimbursement from you without prior approval.  Even though things might be great now you have to hedge for the future that they could be resentful if you don't decide to pay them back for something else they do.  Maybe just a recognition that it looks great and you appreciate their keen eye or skills.

I have a few agents I can recommend, I will send them in a DM.  

Just make sure you are 100% clear that its a rental with the agent.  I have seen individuals try to get coverage as a primary residence because its cheaper.  The issue is that if you lie and the policy doesn't coverage for renters you might be essentially uninsured.  

Things that you can ask about.  

Coverage for less than full replacement value, this will bring down your premium but in case of a complete loss you won't have enough money to rebuild, you'll just have to plant some nice flowers.  

Coverage for pet damage/pet liability (biting)

Coverage for Sewer Backup

Totally emotional questions but I tend to feel that paying off a primary residence earlier is better because you never know what the future holds for you and your income.  Its the less aggressive model but it was programed into me from a young age, keep your business risk separate from the things that you need to live (home, car, food, etc.).  I will not use the equity from my personal residence to invest in real estate, sure it can make more money but its just my level of risk tolerance.  

I would not pay down my primary residence so fast as there is opportunity cost that you would lose and like you stated, time is money.  You should be able to balance paying down your home quicker than the standard 30 years while still investing in real estate, so instead of 1-2 a year, maybe 1 every 2 years?  

Can you self manage yes, will you need "Boots on the ground" yes, and having consistent boots on the ground isn't easy.  Like @Eliott Elias said, you don't need the help until you need the help, and then it can cost significantly more than any savings.  In many cases investors using professional management companies end up netting more post management fee's because managers may get more in rent, screen prospective tenants better, have more regular rent increases, have better rent collection practices, faster eviction process, etc. 

Section 8 is actually much hard to self manage in my opinion.  You need to pass inspections, that can be difficult completely depending on which inspector shows up that day.  You need to sit and wait for the inspector and could have someone waiting for 4+ hours just to find out they canceled and never called to tell you.  If your tenant takes down a CO detector you could get a 24 hour emergency reinspection.  Section 8 sounds good but there is a lot that goes into it from the management side and its getting harder here, not easier.

When you say that the house is "Section 8 approved" that isn't really a thing here.  You get the tenant first, then you get inspected and that is on a per unit basis.  In the same house one unit can pass and one can fail.  After the tenant is in you get reinspected annually or if the tenant complains.  You need to pass the inspection each time or they will stop making payments.  If a section 8 tenant moves out and get another section 8 tenant, you will need to do the inspection all over again. 

Like it was said above, make sure to have an online account with Cleveland Water setup, they will e-mail if there is a big spike in usage.  You can also see the hourly or daily water consumption.  There can be indicators that if there is random high spikes it could be due to a toilet flapper getting stuck, if its slow and steady then probably a dripping fixture or slow leak in a toilet.  Overall I would rate that at the high end of single family use but I wouldn't be overly concerned yet.  They might have had a guest come in and there was someone else taking showers, and using a lot of water during that month.  We generally tell tenants to expect $40-50/person/month for combined water and sewer, many times it is good for setting a budget expectation on their part.  

Do you have any capital to contribute besides your credit score?  If you don't have any capital then it will be hard to get financing because lenders want to make sure you have money of your own and request bank statements to confirm you have the funds personally.  You can try to find a cash partner where you source the deal and both of you go on the loan but then it begs the question what are you bringing to the table?  

If this isn't an option then you will need to source and lock up a good enough deal where someone else gets a strong enough return and there is still meat on the bone for you, this could be accomplished with a cash out refi and then split returns after you return your investors initial capital.

In either case you need to identify how what you bring to the table helps the person who brings the other pieces (cash, expertise/knowledge, or the deal) so you have a compelling offer to the investor/partner.  

I really like South Euclid, its a solid working class community with an ok school district (not as good as the high end areas but better than Cleveland Public).  From the management standpoint the units are always in demand and the city is not difficult to work with.  If you can catch a good deal then I would recommend South Euclid or Euclid.  

I think there is an active manager on the forums who works there, I met him at a conference once and I felt that he was knowledgeable.  I haven't work with him personally so I can't speak about personal experience but at least its a start.  Check to make sure that whatever company you work with has a valid state brokers license (or MI equivalent).

@Drew Sygit This is your area right?

Quote from @Oliver Pham:

Good evening, I would like to ask for all your opinions about this property as an agent recommended me in Cleveland Height, Ohio. It already rehab and already have tenants living in. Is this a good buy and hold property? 

Thank you very much and have a great day.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

I would love to buy anything in Cleveland Heights for $115K that get an $1,850 rent, that doesn't seem reasonable to me.  Also the taxes are a little bit low.  Your maintenance and capex are generous which is good, also if you are ever able to refi at a lower interest rate it would help a good amount.  If you are able to get a house in CH for that price that doesn't need a lot of upfront Capex and will rent for $1,850 that sounds like a good deal.  Also check the school district because parts of the city go to East Cleveland schools which drops the rent price significantly.  

Quote from @Cole Puterbaugh:

Under contract for a 3-unit mfr in Cleveland. My first purchase. 

Purchase price is 177K.

Appraisal is 138K.

I cannot make up the difference with cash since I'm already at the top end of my purchasing ability.

Is ordering another appraisal worth it? Comps in the area seem to support the appraised value...

I'm trying to understand why you would purchase a property so far over appraisal if there aren't supporting comps?  It sounds like you are overpaying unless I'm missing something.  Also I would be suspect that they have cash offers.  If the offers were close most sellers would take a slightly lower cash offer over having to deal with a mortgage.  

Sometimes a bad appraisal ruins a decent deal, sometimes it stops you from making a bad deal.